The 13 Hotel (pictured), a luxury property on the border between Macau’s casino district of Cotai and the residential area of Coloane, has been “focusing on repositioning the business and operational model without gaming” since it opened in August 2018 after obtaining its hotel licensing.
So said the property’s promoter South Shore Holdings Ltd in a Friday filing of its full interim report for the six months to September 30.
In late November, South Shore announced it had widened its fiscal first-half loss. Such deficit was HKD506.7 million (US$65.1 million) in the six months to September 30, compared to nearly HKD442.4 million in the prior-year period.
Peter Coker, the chairman of South Shore, stated in Friday’s full interim results: “We expect consolidated losses to continue as the hotel business was just operational by end of August 2018. We believe targeting a global clientele of customers seeking a unique luxury experience remains an optimal strategy for the Macau market.”
Mr Coker added, referring to some rejig of the investor line-up, as recently flagged to the Hong Kong bourse: “The management has been working hard to finalise the proposed disposal of partial interest in The 13 Hotel as well as other measures with a view to strengthen our balance sheet.”
The management and discussion section of the document affirmed that the hotel segment’s liabilities of approximately HKD5.76 billion as of September 30, were greater than the hotel segment’s assets of circa HKD4.17 billion.
The hotel segment assets included cost of land, hotel property and The 13 Hotel’s fixture, furniture and equipment; including deposits paid.
The hotel’s liabilities included the liability portion of convertible bonds that have been issued and borrowings for financing the hotel development and operation, according to the report.
The company reported in its financial statements for the fiscal year ended March 31, an aggregate impairment of approximately HKD4.70 billion on the carrying amount of assets under the hotel segment.
The group explained at the time that the impairment was due with the absence of gaming operations at the property. Given that South Shore had “no formal agreement” with any Macau gaming “concessionaire or sub-concessionaire as operator, in respect of any gaming operations in The 13 Hotel,” a “significant reduction” of anticipated occupancy and room rates had been made in the group’s business plans.
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